Summary
When deciding to enter international markets, a firm must examine its goals and objectives, determine the risks, decide how many global markets to enter and how they are going enter them. They must take into account the foreign cultures and laws and how their products will perform and be useful to foreign customers, and how the country-of-origin effects can affect consumers and businesses. Effective internal marketing must be matched by a strong sense of ethics, values and social responsibility. Cause marketing cause marketing can be a way for companies to link social responsibility to consumer marketing programs. The marketing department must monitor and audit its success and weaknesses and make changes as necessary to improve. Organizations must be willing to adapt and acquire new skill sets and competencies to emerge as leaders in an ever changing environment where customers are savvier and have greater means to make the company transparent.
A. Competing on a Global Basis
1. In a global industry, competitors’ strategic positions in major geographic or national markets are affected by their overall global positions. A global firm operates in more than one country and captures research and development, production, logistical, marketing, and financial advantages not available to purely domestic competitors. The global market can include services as well as products.
2. Some examples of global companies are Shell, BP, Bayer, Toshiba, and Nike.
3. Global firms plan, operate and coordinate their activities on a worldwide basis. Services are the fastest growing sector and account for two-thirds of global output, one-third of global employment, and 20 percent of global trade. Companies go abroad for various reasons – they may need a larger customer base, want to achieve economies of scale or reduce dependence on one market. There are risks involved also if a firm doesn’t thoroughly research a country’s culture, laws or consumer preferences. When seeking to enter the global market, a company must define its marketing objectives and policies and which countries to enter and how to enter them. Some possible strategies may be: 1) indirect or direct export, 2) licensing, 3) joint ventures, and 4) direct investment. Companies must also decide how much to adapt their marketing strategies to local conditions. One method is to use a standardized marketing program worldwide; however, there are advantages and disadvantages to this method. Advantages are economies of scale in production and distribution, lower marketing costs, power and scope, consistency in brand image, ability to leverage good ideas quickly and efficiently, and uniformity of marketing practices. Disadvantages are that it ignores differences in consumer needs, wants and usage pattern of products, ignores differences in consumer response to marketing programs and activities, ignores differences in brand and product development and the competitive environment, ignores differences in the legal environment, ignores differences in marketing institutions, and ignores differences in administrative procedures. Warren Keegan, has distinguished five product and communications adaptation strategies for entering a global market: 1) product – introduce the product without any change, 2) communications – changing market communications for each local market, 3) price – escalation of price due to the need to cover the added cost of transportation, tariffs, etc., and 4) distribution – how to get products to other nations and how it moves within the foreign country. Another consideration is the country-of-origin effect and how to use positive perceptions of the brand or the products when communicating with foreign consumers.
B. Internal Marketing
1. Internal marketing requires that everyone in the organization accept marketing concepts and goals and engage in choosing, providing, and communicating customer value.
2. Examples of other departments that can interact with customers are technical assistance, customer service, accounting, sales people, store clerks and even cart pushers.
3. Every functional area of an organization can interact with customers. It is important that all employees of an organization present a united front to customers and clients. The marketing department no longer has sole ownership of being the face or the voice of the company. Marketing departments can be organized in different ways: 1) functional organization – has a central leader who coordinates activities; 2) geographic organization – having regional or local marketing managers (area specialists); 3) product or brand management organization – another layer of management that supervises product managers; 4) market management organization – organizes marketing activity to meet the needs of distinct customer groups; and 5) matrix management organization – for companies that produce many products for many markets and employing both product and market managers. Marketing departments must have strong relationships with other departments to coordinate functions and operate in the best way for the company. The organization must strive to be creative and to seek what is best for the customer.
C. Socially Responsible Marketing
1. Effective internal marketing must be matched by a strong sense of ethics, values, and social responsibility.
2. One example of a method companies are trying to become more socially responsible is by using more organic products or products with ingredients that are grown organically, such as organic cotton growers, Chipotle Mexican Grill restaurants that use natural and organic ingredients or PETCO that produces organic and natural pet foods.
3. Many forces are driving companies to become more socially responsible – customer expectations, employee goals and ambitions, government legislation and pressure, investor interest in social criteria, media scrutiny and changing business procurement practices. Many believe that satisfying customers, employees and other stakeholders and business success is tied to practicing social responsible marketing. Organizations should strive for legal and ethical behavior and must ensure every employee knows and observes relevant laws. Companies should have a written code of ethics, build a tradition of ethical behavior and hold their people fully responsible for observing ethical and legal guidelines. More often customers are checking a company’s record on social and environmental issues and responsibility when deciding whether or not to buy from that company. Some companies try to improve their social image by donating large amounts to charities. Sustainability now tops many organizations list – the ability to meet humanity’s needs without harming future generations. Some organizations have been guilty of greenwashing – giving the appearance of being environmental friendly, but actually not. This has made many consumers skeptical when an organization tries to be socially responsible.
D. Marketing Implementation and Control
1. Marketing implementation is the process that turns marketing plans into action assignments and ensures they accomplish the plan’s stated objectives.
2. Johnson & Johnson is a company in which marketing controllers perform financial analysis of marketing expenditures and results, among other analysis, to measure the success or weaknesses of the marketing organization.
3. Strategy addresses the “what” and “why” of marketing but implementation addresses the” who, where, when and how”. Companies are striving to make their marketing operations more efficient and their return on marketing investment more measurable. Marketing control is the process by which firms assess the effects of their marketing activities and programs and make necessary changes and adjustments. There are four types of needed marketing control: 1) annual plan control; 2) profitability control; 3) efficiency control; and 4) strategic control. The average company in the Unites States loses half its customers in five years, half its employees in four years, and half its investors in less than one year. This indicates some marketing weaknesses and the company should undertake a marketing audit – a comprehensive, systematic, independent, and periodic examination of a company’s or business unit’s marketing environment, objectives, strategies, and activities. Even companies in good health can benefit from a regular marketing audit.
E. The Future of Marketing
1. Marketing now entails more accountability than in the past and companies must be more holistic and less departmental. Marketers must strive for customer insight by treating customers differently but appropriately.
2. There are many opportunities for growth and expansion in marketing. India and China are both enormous new sources of demand for products and services.
3. Companies have and are adapting to changes in the marketing environment. To continue to be successful, they must make use of electronic means, building strong information and communications departments. They must develop new sets of skills and competencies in customer relationship management. The must recognize that all employees of the company have the potential to interact with customers and be the voice of the company. Customers now have many ways to interact with a company and with each other concerning a company so organizations should use social media more and traditional media less. The Web allows unprecedented depth and breadth in communications and distribution, and its transparency requires companies to be honest and authentic. Marketers should behave in socially responsible ways and strive for strong legal and ethical behaviors.
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